Eurozone banks to tighten company access to loans in fourth quarter
Frankfurt — Eurozone banks are set to tighten access to corporate credit for the first time in two and a half years as they become more wary of risk and negative interest rates eat into their profit, a European Central Bank survey showed on Tuesday. The ECB’s ultra-easy policy — including bond purchases, free loans to banks and a charge on deposits — has fuelled a recovery in eurozone lending but banks’ margins have started to suffer, raising concerns about the negative side effects of sub-zero rates. Banks stopped easing credit standards for enterprises in the three months to September and a narrow majority expects to tighten them in the current quarter, an ECB survey of 141 lenders showed. The banks, polled last month, cited lower risk tolerance as a tightening factor when deciding which companies would get a loan or credit line in the three months to September. They also voiced their discomfort with the ECB’s negative deposit rate, effectively a charge on banks’ excess deposit wi...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.